SNL reported a 29 per cent decrease year on year for global non-ferrous metals exploration budgets compared with 2012.

Also in the 2013 report, SNL showed that the major miners recorded a 24 per cent drop in exploration spending, while juniors took a bigger hit, with exploration budgets falling 39 per cent over 2012.

Drilling activity fell again in the June quarter of 2014 and has now declined for 32 months straight. Reduced drilling has caused ore reserves to fall again in the June quarter.

According to the report the reduction was particularly sharp for gold–barely 13million ounces of new resources were announced during Q2 versus 38 million additional ounces during the first three months of the year.

SNL says the reduction "was felt around the world, although the shortfall was particularly harsh in North and South America."

SNL finds encouraging signs in the number of drilling reports stabilizing at around 240 properties globally per month since February.

‘New development’ projects for the purposes of the report are defined as the announcement for the first time of a capital expenditure commitment and a life-of-mine net present. These new development projects showed substantial improvement with 20 new feasibility studies published against just eight during Q1.

Canada had the largest decrease in exploration budgets (41 per cent) for any region globally. Exploration spending in Canada now matches Australia, accounting for 13 per cent of global exploration.

It should be noted that exploration budgets were at a record high in 2012, with 2013 budgets falling to levels similar to 2008, prior to the Global Financial Crisis. More recently Canadian junior mining companies have seen rapid rises in stock price due to exploration.

With positive signs for a recovery in exploration Canada and Australia could become more suitable for mining investment. The 2013 edition of The Fraser Institute’s Annual Survey of Mining Companies, rated the policy perception in Australia and Canada very positively. If the trend in policy continues coupled with resurgence in exploration spending we could see positive growth in the sector.